State panels OK increase in gas tax, tolls to fix roads

RICHMOND

Democrats prevailed Wednesday in pushing through the state Senate a bill that would rely on a 6-cent-per-gallon gasoline tax increase to raise money for transportation projects, but their glory may be short-lived.

In a 21-16 vote, the Democratic-controlled Senate vote approved a package that would raise about $1 billion annually to fix existing roads and build new ones throughout the state, as well as raise money for projects in Hampton Roads and Northern Virginia with new regional taxes. No Republicans supported the bill.

"We did what we were supposed to do," said Senate Majority Leader Richard Saslaw, D-Fairfax, who sponsored the bill, adding that it's now in the hands of the House of Delegates. "We sent a plan down. Now it's up to them."

Saslaw's bill is not expected to get enough votes in the Republican-controlled House where tax increase proposals are not greeted warmly.

Before passage, Senate Republicans panned the plan as unfairly skewed toward Northern Virginia and tax-heavy in the midst of a soft economy.

"I am not afraid to increase taxes," said Sen. Thomas Norment Jr., R-James City. "But this is not the time. It is not the place, and every one of you in this room knows it is not going to happen."

Saslaw's plan includes a statewide penny-on-the-gallon increase in the gas tax in each of the next six years, increasing the tax on auto sales to 3.5 percent from 3 percent, and raising to 5.25 percent from 5 percent the state sales tax.

Together, the revenue sources would raise $452 million in the first full year of implementation.

To offset the higher gas tax, Saslaw said his bill would cut by 0.5 percent the sales tax on groceries.

Saslaw's plan also would raise $221 million annually for local projects in Hampton Roads by installing an extra regional penny-on-the-dollar

sales tax and a 1 percent wholesale gas tax increase.

In Northern Virginia, his plan would generate about $335 million through increases to a regional sales tax, a higher grantors tax rate on real estate sales and a $5 per night hotel room tax.

Sen. Kenneth Stolle, R-Virginia Beach, who opposed the bill, said Northern Virginia would get the bulk of new transit dollars, to the exclusion of Hampton Roads and other regions.

"This bill, on a statewide basis, goes against everything that the citizens of Hampton Roads have asked us to do up here," Stolle said.

Sen. Yvonne Miller, D-Norfolk, who voted for the measure, said her constituents have grown impatient waiting for lawmakers to act.

"Whenever the citizens of the commonwealth rise up and say to us, 'You will either solve this problem or we'll leave,' maybe then we will find a solution."

The Senate also approved a bill that would create a lockbox for transportation funds to prevent the money from being spent on other things. To become law, the measure must pass the House this session, then a future General Assembly session, and be approved by voters.

In the House on Wednesday, leaders upheld a pledge made Monday to delay action on Gov. Timothy M. Kaine's plan to increase state transportation funding by $1.1 billion until the Senate voted.

Kaine's plan was the subject of considerable debate, but not a vote, in the Republican-

controlled Rules Committee. It could come up for a House vote as early as today.

House Majority Leader Morgan Griffith, R-Salem, said legislators should explore options for raising road dollars that don't rely on taxes taken "out of the pockets of working people."

Defending the plan, Del. Lionell Spruill Sr., D-Chesapeake, criticized Republicans for not producing an alternative or doing "anything other than crying."

Some legislators expect that ongoing debate probably means the special session will extend into next week.

Julian Walker, (804) 697-1564, julian.walker@pilotonline.com